After taking the first array prejudice, Brazil Kirin sells assets

São Paulo-In 2011, when the Japanese Kirin shelled out nearly $ 4 billion for control of the family brewery, Schincariol-at the time, Deputy leader of the national market, Brazil had increased 7.5% in the previous year and performed as a competitor able to disturb the giant Ambev.
Five years later, the situation was reversed completely: the brazilian economy entered a recessive spiral-in 2015, gross domestic product (GDP) shrank by 4%-and Brazil Kirin saw its relevance if empty, losing 25% of market share and smarting fourth place in sales in the country.
The situation reached a critical point so that, last month, the President of Brazil Kirin, Andre Salles, presented a recovery plan of local operation to the array.
The changes, which include the reorganization of the brand portfolio and the promise of cost-cutting to just 200,000,000 R$ this year, are a response to the worst results that the company has been showing: in 2015, the Japanese group recorded the first loss in its history, basically because of the problems in Brazil.
Last year, Brazil''s revenues plunged 25.4%, Kirin to about 134 billion yen (about US $ 1.3 billion), due to the strong depreciation of the real and also the fall of 16.8% in sales of beer, in comparison to 2014.
The result was much lower than presented by all the beer market in the country, although he has been back, retracting 2%, according to data from the control System for the production of beverages (Sicobe) with the IRS.
The Kirin global had to shell out more than $ 1 billion to cover projected results that failed to materialize in the world-90% of the reserves, however, referred to the Brazilian market.
In the first quarter, the drop in sales in the country was stopped, according to the company, but the operation continued in the Red-the cash generation, as measured by Ebitda (earnings before interest, taxes, depreciation and amortization), was negative in R$ 62,000,000.
Industries
In the presentation I made to shareholders on June 7, the President of the brazilian operation revealed the goal of reducing corporate costs, renegotiate contracts for raw materials and packaging and optimizing assets. According to the State it was found, that means that the company can get rid of most plants.
The process of industrial capacity reduction began in April, when the company disbanded the unit of waterfalls of Macacu, Rio de Janeiro, where the brands of Kirin always faced resistance.
The unit was passed to Ambev. According to the story, it was the sale of other units in a scenario of falling volume would be a quick way out to cut costs.
Market sources say that the company would be willing to pass along other 2 13 units that still remains in the country.
For the competitors who are growing and need to expand production, the advantage is to buy a factory ready can halve the value of the investment in relation to the construction of a new plant.
Ambev itself could have interest in absorbing more Kirin''s assets, according to sources. Heineken, which has been gaining market share rapidly in the country, but has not yet reached the 10% stake, would also be keeping a close eye on capacity expansion options, although it is currently building a new plant in Goiás.
Asked about the possibility of further reducing its industrial operations in Brazil, Kirin said that "it is always attentive to the external scenario and the beverage market, seeking the maintenance of your ability". Sought, Ambev and Heineken had no comment.
Brands
The main problem of the Kirin, according to sources, is that the company has more industry and selling points, as it failed to build brands.
"To have a barbecue at home, for the family, the consumer can buy the cheapest beer. But, if you''re being seen, will look for brands that give status ", explains Paulo Solmucci, President of the Brazilian Association of bars and Restaurants (Abrasel).
According to him, this helps to explain the success of the brands Heineken and Stella Artois, Ambev, in nightclubs.
The proposal of the Japanese holding company includes André Salles the repositioning of the brand portfolio. The company has already announced that it will take the Wanton Blonde market, in recent years, one of its main market bets, which concentrates the largest Pilsen''s sales volume in the country.
The brand Devassa, which was sold in the premium segment, will be repositioned with lower price. Already the Eisenbahn, who was in the craft category, will "go down" for the premium position.
One of the goals of the reorganization, according to the filing, is "reduce dependence on the economic sector".
To market sources, the attempt is valid, but the task of making a transformation now will be arduous. According to the food and beverage consultant Adalbert Viviani, the competition is much stronger today than five years ago, when Kirin bought the Schincariol.
"The competitive universe was quite different. Heineken did not yet exist and the Petrópolis had no strength. It would be a lot easier to have done this movement back there, instead of now. "